Decoding Flipkart’s $600 Mn round, captable and valuation

E-commerce giant Flipkart has raised $600 million or Rs 5,000 crore from its holding company Walmart through the investment arm (FIT HOLDINGS SARL).

The board at Flipkart has passed a resolution to allot 34,41,946 shares at an issue price of $174.32 per share to raise $600 million or Rs 5,000 crore, regulatory filing sourced from the Singapore entity shows.

Walmart through its investment arm (FIT HOLDINGS SARL) spearheaded the round with $598.7 million while Palomino Master and Azteca Partners LLC contributed $0.6 million and $0.7 million, respectively, during the fundraise.

Following the fresh proceeds, Walmart increased its stake to 84.6% followed by Tencent and CPP Investment which own 7.1% and 2.3% shares, respectively.

The company is expected to raise $1 billion in total with $400 million coming from existing and new investors, as per media reports.

Flipkart in the filing said that it will use the fresh proceeds to expand its operations, strengthen its supply chain and tech capabilities.

To recall, Walmart acquired a majority stake of 77% in Flipkart for about $16 billion in August 2018. Since then, it has made multiple investments in the company to increase its stake to nearly 85%.

As per TheKredible estimates, Flipkart has been valued at $32.55 billion post-allotment. While the company’s valuation remained unchanged after Walmart’s investment, the new and other existing investors may inject the remaining $400 million at 5-10% premium.

Flipkart has raised direct investment after a gap of nearly 30 months. In July 2021, it received $3.6 billion led by SoftBank at a valuation of $37.6 billion. The company was revalued at $33 billion after separation from PhonePe which announced its hive off from the e-commerce marketplace in December last year.

Meanwhile, Walmart made an indirect investment of $3.5 billion to acquire the remaining stakes of Accel, Tiger Global and Binny Bansal in Flipkart in July this year. The trio collectively divested around 6% stake in Flipkart. Following the secondary investment, Walmart increased its stake to 80.5%.

Flipkart reported a total revenue of Rs 56,012.8 crore in FY23 from Rs 51,176 crore in FY22. The company’s losses stood at Rs 4,890.6 crore in the last fiscal year.